Measuring Agency Business Development Effectiveness
Agency business development success is often measured by revenue. And of course that’s a good quantitative measure—did you make your numbers or didn’t you?
But a lot goes into a successful new business operation –
How you market your agency and maintain its public profile
How you reinforce your agency’s value proposition
The methods you use consistently and repeatedly to close new business
How you allocate time and resources consistently toward proactive business development
The tools and operational framework you have in place to support an agency business development practice
These and more are leading indicators. And they are the byproduct of a commitment to taking action that leads to hitting your revenue numbers.
Revenue is a lagging indicator. You don’t know if you’re successful until you get there.
If you are successful, you feel great! If you’re not, you’re kicking yourself for another year or quarter in which you didn’t get your act together.
Personally I find leading indicators to be more satisfying. Lagging indicators can elicit a lot of emotion and that compromises your ability to look objectively at the state of your agency new business operation
On the other hand, leading indicators are more objective and practical in getting you to your new business goals. When the leading indicators are positive, you’re probably on the right path, even if you’re not yet seeing the results. When they’re not positive? You have an opportunity to reassess, recalibrate, and redeploy.
First, measure the health of your leading indicators of success.
Before any engagement with a new client, I do a qualitative assessment. This is valuable to me because it gets me smart quickly on the agency and where I think we want to focus to make business development more effective for that agency. But it’s equally valuable to the agency because they have this opportunity to take a step back and look at current strengths and weaknesses. It gives us a place to start to create a plan of action, the success of which will be measured in both leading and lagging indicators.
I’ve recently added a scorecard to accompany this assessment—a quantitative way to assess the more qualitative nature of agency business development. It provides my clients a benchmark to measure from and we revisit it quarterly to measure what’s improving and what needs recalibration.
Want to try it out?
Here are some of the questions I’ll include. It’s definitely a “lite” version and doesn’t take into consideration the subtleties inherent in many of the questions, but it’s enough to take a test drive to see how your agency is measuring up.
All you need to do is grade yourself on a scale from zero to ten:
0 = Nonexistent or woefully inadequate or you simply have no idea
5 = Adequate, but needs improvement
10 = In place, strong, working well
It’s divided into three sections that correlate to the three most common complaints I hear when I talk to agency owners:
“I can't find enough clients for my agency (especially the right clients).”
In my experience, this often has less to do with the act of seeking those clients and more to do with weaknesses around an agency’s business development strategy and positioning.
Does your agency’s origin story clearly link to your ability to impact on your clients’ business today?
Do you have defined points of differentiation that offset your agency from others?
Have you defined your ideal client profile(s)?
How strong is your value proposition or "elevator pitch"?
Have you defined marketing messaging that is targeted to the ideal client profile?
How confident are you in your/your team's ability to conduct business development activities?
Are your agency business development activities aligned to your vision for growth?
“We don’t win enough.”
This indicates the extent to which you need to improve or build skills around salesmanship and closing deals.
Are you good at leveraging your professional network for new business leads?
Do you have a list of target prospects based on your ideal client profile?
How strong is the process for nurturing prospects after they show interest?
How strong is your selection criteria for qualifying a new business opportunity?
Is your team assigned to the right roles to support the buying process?
How confident are you about advancing the sale with a prospect?
Do you and your team have a process for preparing for a pitch presentation?
How strong is your team’s performance in a pitch meeting?
How satisfied are you with your close rate?
“New business at our agency is chaotic and overwhelming.”
Sometimes this is a good problem to have because it means your pipeline is full, you’re pitching a ton—and hopefully winning a ton too.
But it’s still a problem, assuming you want a business development operation you can sustain long-term and you don’t want to contribute more than your fair share to the “great resignation”. Often the problem is a lack of defined processes or systems which prevents you from scaling your agency’s business development activities.
Ask yourself:
Do you have a plan (annual, quarterly) for business development at your agency?
Do you have a way of tracking prospects through your pipeline?
How easy is it to project revenue based on your pipeline?
Do you have a set of core activities you perform on a consistent basis to promote your agency, attract clients, and win pitches?
How regularly do you review or add complementary activities to your core set business development activities?
Do you regularly meet with the team that shares sales and marketing activities?
Do you have a way to measure your team’s business development success?
To what extent do you support the team doing business development with tools and training?
How strong is your business development toolset at your agency?
So, how did you do? And was it a helpful exercise for shining the light on the areas that need the most attention?
The bottom line: you deserve to have control over your agency’s new business destiny.
Agencies start to see this shift when they begin to rely less on reacting to opportunities and more on creating them. But to do that, you need a strategy and a plan. And for that, you must assess where you’re strong and where you’re weak so you can leverage your strengths and eliminate or offset your weaknesses—a set of controls, if you will, to adjust to increase the effectiveness of your agency’s approach to business development.